Corporate Taxation: TOEIC Practice Test Questions & Answers

The TOEIC (Test of English for International Communication) is an English language proficiency test designed to assess the English language skills of non-native speakers in a business or professional context. The test is widely used by organizations around the world to evaluate the English language skills of job candidates, employees, and students.

The TOEIC test consists of two parts: the TOEIC Listening and Reading Test and the TOEIC Speaking and Writing Test. The TOEIC Listening and Reading Test is a paper-and-pencil test that consists of multiple-choice questions, while the TOEIC Speaking and Writing Test is a computer-based test that consists of spoken and written responses to prompts.

The test is designed to measure a wide range of English language skills, including listening comprehension, reading comprehension, speaking ability, and writing ability. Overall, the TOEIC is a widely recognized and respected English language proficiency test that is used by organizations around the world to evaluate the English language skills of non-native speakers.

Q&A Topic: Corporate Taxation

Corporate taxation refers to the taxes that businesses, also known as corporations, must pay on their income or profits. The specifics of corporate taxation vary depending on the country in which the corporation operates. In the United States, for example, corporations are taxed at the federal level and may also be subject to state and local taxes.

The corporate tax rate is the percentage of a corporation’s profits that it must pay in taxes. The rate can vary depending on the size of the corporation and the type of income being taxed. In the United States, the corporate tax rate is currently 21%.

Corporations may also be subject to other types of taxes, such as sales tax on products or services they sell, or property tax on any real estate they own. It is important for corporations to understand their tax obligations and to properly plan for and pay their taxes in a timely manner to avoid penalties and fines.

Here are some questions that can help you to clear the TOEIC exam:

Q1 Rob Norton, of eCompany Now and Fortune magazines, notes in the article quoted below that corporate taxes are among the least efficient and least ______________ of taxes.

(a) avoidable
(b) defeatable
(c) defensible
(d) reprehensible

Answer: (c) defensible

Q2 The tax is popular with the man ______________, who believes, incorrectly, that it is paid by corporations.

(a) in the shop
(b) in the street
(c) on the block
(d) on the job

Answer: (b) in the street

Q3 The federal corporate income tax applies only to some businesses — those chartered as corporations — and not to partnerships or ______________ proprietorships.

(a) simple
(b) single
(c) sole
(d) strict

Answer: (c) sole

Q4 The federal tax is levied at three different rates on different ______________ of income: 15 percent on taxable income under $50,000; 25 percent on income between $50,000 and $75,000; and 34 percent on income above that.

(a) brackets
(b) components
(c) portions
(d) segments

Answer: (a) brackets

Q5 A good reason that state and local corporate income taxes remain low is that corporations could easily ______________ out of states that imposed unusually high taxes.

(a) reinstate
(b) relegate
(c) relocate
(d) replace

Answer: (c) relocate

Q6 Except for emergency taxes in wartime, corporate profits were first taxed in 1909, when Congress ______________ a 1 percent tax on corporation income.

(a) decided
(b) enacted
(c) proscribed
(d) retracted

Answer: (b) enacted

Q7 The Tax Reform Act of 1986 was designed to increase the share of federal revenues collected via the corporate income tax and to decrease the share from the ______________ income tax.

(a) individual
(b) personnel
(c) private
(d) single

Answer: (a) individual

Q8 While the top corporate tax rate was cut, deductions for capital expenditures were severely ______________, and as a result the effective tax rate for many corporations rose.

(a) amended
(b) curtailed
(c) examined
(d) extended

Answer: (b) curtailed

Q9 The central problem with the corporate income tax from an economic point of view is that, ultimately, only ______________ can pay taxes.

(a) entities
(b) companies
(c) people
(d) some

Answer: (c) people

Q10 As early as the 17th century, Sir William Petty, one of the ______________ of modern economics, argued that a tax on the production and sale of commodities would eventually be shifted by producers to consumers, who would pay it in the form of higher prices.

(a) planners
(b) precursors
(c) predecessors
(d) progenitors

Answer: (d) progenitors

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